Turnout high as Irish polls close

Irish elections have been dominated by the collapse of the economy and a hated international bailout [AFP]

Vote counting is under way in Ireland following a high turnout in the country's general election, as voters vent their anger over the euro zone nation's unpopular international financial bailout.

Initial exit polls from Friday's election were due out at 8:00am local time (08:00 GMT) on Saturday, with voters expected to expel the ruling Fianna Fail party and make Brian Cowen's government the first victim of the euro zone debt crisis.

State media reported predictions of a turnout of around 70 per cent of the 3.1 million people eligible to vote as people flocked to the ballot box to show their fury over the collapse of the Celtic Tiger economy.

Across the country polling officers reported bigger numbers casting ballots during the day with the strong interest continuing right up until closing at 10pm.

Ireland's main opposition party was expected to be swept into power on a wave of voter anger over the country's economic collapse and resentment at the harsh rescue terms laid down by its European partners.

Enda Kenny's centre-right Fine Gael party is expected to replace a decimated Fianna Fail as the dominant force in Irish politics, in what could be the biggest political shake-up since Ireland won independence from Britain in 1921.

First political victim

Opinion polls carried out before Friday's election showed Fianna Fail, in government for most of the past 79 years, would be the first political victim of Europe's debt crisis while Fine Gael was within shot of an outright majority for the first time.

RTE, the state broadcaster, said voter turnout appeared to be strong with expectations of an increase on the 67 per cent turnout recorded at the last election in 2007 when a disastrous property bubble, at the root of the current crisis, peaked.

Ireland's transformation from economic pin-up to euro zone struggler has electrified the three million plus electorate but overall their instincts remain conservative.

Anger over Ireland's shattered economy was expected to trigger a backlash at the ballot box on Friday

Like Fianna Fail, Fine Gael has a pro-business and low-tax ideology and it has pledged to stick to the overall austerity targets laid down by the EU and IMF as a condition of an 85 billion euros bailout package agreed in December.

Kenny, a former teacher and Ireland's longest-serving parliamentarian, is almost certain to be the next prime minister.

Analysts expect he will form a coalition with the centre-left Labour party to ensure a large parliamentary majority to navigate the EU/IMF programme and avoid the political instability that dogged the dying days of the Fianna Fail administration.

The 59-year-old will face immediate pressure to fulfil an election pledge to renegotiate parts of the bailout and ease some of the burden on an electorate already struggling to make ends meet.

Fine Gael has reversed previous threats to unilaterally impose losses on some senior bondholders in Irish banks, who are protected under the EU/IMF deal, but its "burn the bondholder" rhetoric was enough to prompt a downgrade of some bank debt this month by ratings agency Moody's.

While Ireland's borrowing costs may be reduced as part of a wider EU agreement on resolving the debt crisis next month, Dublin is unlikely to receive a green light to impose losses on senior bondholders in Irish banks due to opposition from the European Central Bank (ECB).

Emergency funding

Given that the ECB is keeping Irish banks alive with more than $173.1bn in emergency funding, Fine Gael, a party in the European Christian Democrat tradition, is unlikely to go against Frankfurt's wishes.

But in return for a "comprehensive package" to deal with Europe's debt crisis, due to be finalised at a March 24-25 summit, Ireland like other euro zone nations will have to agree to concessions and Kenny will have to battle to ringfence Dublin's sacrosanct low rate of corporation tax.

Even with more relaxed borrowing terms, Ireland will still have to get the worst budget deficit in Europe under control by 2015 and if growth falters more cuts may be needed on top of last year's record austerity measures and the $12.4bn in adjustments pencilled in for 2012-2014.

The return of mass emigration - an estimated 1,000 people are leaving the island every week - and a disinclination to take the streets has meant Ireland has avoided the kind of mass public protests seen in fellow euro zone struggler Greece.

But hardleft parties, including Sinn Fein, once the political wing of the now-dormant Irish Republican Army (IRA), have seen a surge in support and are expected to make up the minority in the new parliament.